Bigger fall in HDB resale flats sold in December 2018 due to cooling measures: Experts

HDB prices in December 2018 were down 14.3 per cent from its peak in April 2013. ST PHOTO: JASMINE CHOONG

SINGAPORE - The number of Housing Board flats that changed hands in December 2018 was 23.9 per cent lower than in November, a bigger fall than a year ago, according to flash data from real estate portal SRX on Thursday (Jan 3).

This was the fifth straight month of decline since July's cooling measures which included a tightening of loan limits.

While December is typically the slowest month of the year, with many buyers and sellers on vacation, the drop last year is larger than the 20.1 per cent fall seen in 2017.

In terms of absolute numbers, the resale volume in December 2018 at 1,434 flats was also smaller: 9.6 per cent lower than December 2017's 1,587 units.

"The bigger month-on-month fall and lower number of resales could be due to the effects of the recent cooling measures and concerns about the depreciating value of ageing flats this year," OrangeTee & Tie research head Christine Sun noted.

Agreeing, PropNex Realty chief executive Ismail Gafoor said: "The big difference is that in 2017, market sentiment was much stronger, with many en bloc sales. By the middle of 2018, with the cooling measures in, buyers didn't have as much urgency to get a flat. They know nothing is going to change adversely."

HDB resale prices also decreased by 0.3 per cent in December compared to the previous month.

Prices in December were down 14.3 per cent from their peak in April 2013. Year on year, prices in December 2018 dipped 2.1 per cent from December 2017.

While the overall HDB resale price index continued to fall, certain segments saw some bright spots.

SRX data showed that the premium that buyers were prepared to pay over market value last month was relatively larger for four- and five-room flats. While the overall median transaction over X-value (TOX) fell $1,000 to negative $2,000, the TOX for four- and five-room flats was negative $1,000 and zero, Ms Sun noted.

TOX is a measure of whether buyers are overpaying, or underpaying for their units, compared with a market value that is computer-generated by SRX Property.

This was also smaller compared to three-room flats and executive flats, where the TOX was negative $5,000 and negative $6,000 respectively.

In addition, prices of flats in non-mature estates increased by 0.2 per cent in December, whereas flats in mature estates dipped by 1 per cent.

Ms Sun said the price increase could be attributed to more flats in Sengkang and Punggol reaching their minimum occupation period and entering the resale market.

"Some of these flats are able to fetch good prices as they are new and well-designed. The government's plans to further develop Punggol into the next digital district may have also increased the attractiveness of these flats," she said.

Join ST's Telegram channel and get the latest breaking news delivered to you.